PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 355. REIMBURSEMENT RATES

SUBCHAPTER J. PURCHASED HEALTH SERVICES

DIVISION 4. MEDICAID HOSPITAL SERVICES

1 TAC §355.8058

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes an amendment to §355.8058, concerning Inpatient Direct Graduate Medical Education (GME) Reimbursement.

BACKGROUND AND PURPOSE

The purpose of the proposal is to make clarifying and corrective updates to this rule. In accordance with the existing rule regarding state-owned or state-operated teaching hospitals, HHSC uses the Centers for Medicare & Medicaid Services (CMS) final audited cost report (ACR) from state fiscal year (SFY) 2007 to calculate the base year average per resident amount for state-owned or state-operated teaching hospitals. The proposed rule will instruct HHSC to use the most recent final audited cost report to make this calculation. In addition, Medicare cost report line references will be updated to align with the calculation methodology for the GME programs.

SECTION-BY-SECTION SUMMARY

Formatting, punctuation, and grammar edits are made throughout the rule for clarity and consistency.

The proposed amendment to §355.8058(a)(2)(B)(i) updates the definition of "Base year average per resident amount" to be based on the most recent CMS final ACR instead of the final ACR ending in state fiscal year 2007. The proposed amendment also corrects the cost report line references for Medicaid allowable inpatient direct GME cost and unweighted full time equivalent (FTE) residents. This section of the rule applies to state-owned or state-operated teaching hospitals.

The proposed amendment to §355.8058(a)(2)(B)(ii) updates the definition of "Current FTE residents" by correcting the cost report form and line references for unweighted FTE residents. This section of the rule applies to state-owned or state-operated teaching hospitals.

The proposed amendment to §355.8058(a)(2)(B)(iii) updates the definition of "GME Medicaid inpatient utilization percentage" by correcting the cost report form and line references for inpatient days and clarifying the numerator and denominator used in the calculation. This section of the rule applies to state-owned or state-operated teaching hospitals.

The proposed amendment to §355.8058(a)(2)(E) clarifies the description of "quarterly FTE data" used to calculate the quarterly interim GME payments made to state-owned or state-operated teaching hospitals.

The proposed amendment to §355.8058(b)(2)(B) corrects the cost report line references for FTE residents. This section of the rule applies to non-state government-owned and operated teaching hospitals.

The proposed amendment to §355.8058(b)(2)(C) clarifies which value is used for Medicare per resident amount (PRA). This section of the rule applies to non-state government-owned and operated teaching hospitals.

The proposed amendment to §355.8058(b)(2)(D) more specifically cites the cost report line references for Medicaid and total inpatient days used to calculate the GME Medicaid inpatient utilization percentage. This section of the rule applies to non-state government-owned and operated teaching hospitals.

The proposed amendment to §355.8058(c)(2)(B)(i) corrects the cost report line references for FTE residents. This section of the rule applies to privately-owned hospitals.

The proposed amendment to §355.8058(c)(2)(C) clarifies the cost report line references for Medicare per resident amount (PRA). This section of the rule applies to privately-owned hospitals.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program:

(2) implementation of the proposed rule will not affect the number of HHSC employee positions:

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will not create a new regulation;

(6) the proposed rule will not expand, limit, or repeal existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The rule does not impose any additional costs on small businesses, micro-businesses, or rural communities that are required to comply with the rule.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because this rule does not impose cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Victoria Grady, Director of Provider Finance, has determined that for each year of the first five years the rule is in effect, the public will benefit from the adoption of the rule due to increased accuracy in the description of the Inpatient Direct GME program methodology.

Trey Wood has also determined that for the first five years the rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule because the rule does not impose any additional fees or costs on those who are required to comply.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC HEARING

A public hearing to receive comments on the proposal will be held by HHSC through a webinar. The meeting date and time will be posted on the HHSC Communications and Events Website at https://hhs.texas.gov/about-hhs/communications-events and the HHSC Provider Finance communications website at https://pfd.hhs.texas.gov/provider-finance-communications.

Please contact the Provider Finance Department Hospital Finance section at pfd_hospitals@hhsc.state.tx.us if you have questions.

PUBLIC COMMENT

Written comments on the proposal may be submitted to the HHSC Provider Finance Department, Mail Code H-400, P.O. Box 149030, Austin Texas 78714-9030, in person at 4601 West Guadalupe Street, Austin, TX 78751, or by email to pfd_hospitals@hhsc.state.tx.us.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) e-mailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule §355.8058, concerning Inpatient Direct Graduate Medical Education (GME) Reimbursement." in the subject line.

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC's duties; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code Chapter 32.

The amendment affects Texas Government Code Chapter 531 and Texas Human Resources Code Chapter 32.

§355.8058.Inpatient Direct Graduate Medical Education (GME) Reimbursement.

(a) The Texas Health and Human Services Commission (HHSC) uses the methodology in this subsection to calculate Inpatient Direct Graduate Medical Education (GME) cost reimbursement for state-owned or state-operated teaching hospitals.

(1) Effective September 1, 2008, HHSC or its designee may reimburse a state-owned or state-operated teaching hospital with an approved medical residency program the hospital's inpatient direct GME cost for hospital cost reports beginning with state fiscal year 2009.

(2) Reimbursement of inpatient direct GME cost for state-owned or state- operated teaching hospitals.[:]

(A) Inpatient direct GME cost, as specified under methods and procedures set out in the Social Security Act, Title XVIII, as amended, effective October 1, 1982, by Public Law 97-248 is calculated under similar methods for each hospital having inpatient direct GME costs on its tentative or final audited cost report.

(B) Definitions.

(i) Base year average per resident amount--The [the] hospital's Medicaid allowable inpatient direct GME cost as reported on CMS Form 2552-10, [2552-96,] Hospital Cost Report of the most recent Centers for Medicare & Medicaid Services (CMS) final audited cost report (ACR) [ending in state fiscal year 2007]; Worksheet B; Part I; Column 25[26]; Line 118[95], divided by the unweighted full time equivalent (FTE) [FTE] residents from Worksheet S-3; Part I; Column 9; the sum of Lines 14, 16, 17, and 18[Line 25].

(ii) Current FTE residents--The [the] hospital's number of FTE [full time equivalent (FTE)] interns, residents, or fellows who participate in a program that is determined by HHSC to be a properly approved medical residency program including a program in osteopathy, dentistry, or podiatry, as required in order to become certified by the appropriate specialty board, as reported on CMS Form 2552-10 [2552-96], Hospital Cost Report; Worksheet S-3; Part I; Column 9; the sum of Lines 14, 16, 17, and 18 [Line 25].

(iii) GME Medicaid inpatient utilization percentage--The [the] hospital's proportion of paid Medicaid inpatient days, including managed care days, divided by the hospital's total inpatient days, as reported on CMS Form 2552-10; Worksheet S-3; Part 1; columns 7 and 8. [2552-96, Hospital Cost Report adjusted to Medicaid Claim Summary Report; Worksheet S-3; Part 1; Line 12; Column 5, divided by the hospital's total inpatient days, as reported on Worksheet S-3; Part 1; Column 6, Lines 12, 14 (subprovider days), and 26 (observation days). Medicaid inpatient days and total inpatient days will include inpatient nursery days.]

(I) The numerator (total Medicaid inpatient days including managed care days) is the sum of Worksheet S-3, Part I, column 7, Lines 1 through 4, 8 through 13, 16 through 18, 28, and 30 through 32 and all subscripts of these lines.

(II) The denominator (total inpatient days) is the sum of Worksheet S-3, Part I, column 8, Lines 1 through 4, 8 through 13, 16 through 18, 28, and 30 through 32 and all subscripts of these lines.

(C) HHSC calculates the total GME payments for each hospital as follows:

(i) multiplies the base year average per resident amount by the applicable CMS [Centers for Medicare and Medicaid Services (CMS)] Prospective Payment System Hospital Market Basket index;

(ii) multiplies the results in clause (i) of this subparagraph by the number of current FTE [full-time equivalent (FTE)] residents; and

(iii) multiplies the results in clause (ii) of this subparagraph by the GME Medicaid inpatient utilization percentage, which results in the total GME payments.

(D) Inpatient direct GME costs are removed from the reimbursement methodology and not used in the calculation of the provider's inpatient cost settlement.

(E) The GME interim payments will be reimbursed on a quarterly basis only after hospital services have been rendered. The interim payments are payable within 90 days of the receipt of the hospital's quarterly resident FTE data. Each hospital's annualized [quarterly] resident FTEs based on quarterly [FTE] data will be divided by 4 to determine the average resident FTEs for each quarter. The interim payments will be reconciled and settled based on audited final cost report data.

(F) To receive GME payments from HHSC, a state-owned or state-operated teaching hospital must be enrolled as a Medicaid provider with HHSC and provide intergovernmental transfers to HHSC to fund the non-federal portion of reimbursement for GME costs.

(b) HHSC uses the methodology in this subsection to calculate [reimbursement for] GME cost reimbursement for non-state government-owned and operated teaching hospitals.

(1) Effective October 1, 2018, HHSC or its designee may reimburse a non-state government-owned and operated teaching hospital with an approved medical residency program the hospital's estimated Medicaid inpatient direct GME cost.

(2) Definitions.

(A) Non-state government-owned and operated teaching hospital--A [a] hospital with a properly approved medical residency program that is owned and operated by a local government entity, including but not limited to, a city, county, or hospital district.

(B) FTE residents--The [the] hospital's number of unweighted FTE [full time equivalent (FTE)] interns, residents, or fellows who participate in a program that is determined by HHSC to be a properly approved medical residency program, including a program in osteopathy, dentistry, or podiatry, as required in order to become certified by the appropriate specialty board, as reported on the Hospital Cost Report; CMS Form 2552-10; Worksheet S-3; Part 1; Column 9; the sum of Lines 14, 16, 17, and 18 [Line 27].

(C) Medicare per resident amount (PRA)--Average [average] direct cost per medical resident, as reported on the Hospital Cost Report; CMS Form 2552-10; Worksheet E-4; Line 18; the greater of Column 1 or Column 2.

(D) GME Medicaid inpatient utilization percentage--The [the] hospital's proportion of Medicaid inpatient days, including managed care days, divided by the hospital's total inpatient days, as reported on Hospital Cost Report; CMS Form 2552-10; Worksheet S-3; Part 1; columns 7 and 8.

(i) The numerator (total Medicaid inpatient days including managed care days) is the sum of Worksheet S-3, Part I, column 7, Lines 1 through 4, 8 through 13, 16 through 18, 28, and 30 through 32 and all subscripts of these lines.

(ii) The denominator (total inpatient days) is the sum of Worksheet S-3, Part I, column 8, Lines 1 through 4, 8 through 13, 16 through 18, 28, and 30 through 32 and all subscripts of these lines.

(3) HHSC calculates the total annual GME payment for each hospital as follows:

(A) multiplies the FTE residents by the Medicare per resident amount; and

(B) multiplies the results in subparagraph (A) of this paragraph by the GME Medicaid inpatient utilization percentage.

(4) On October 1 of each year, the cost report most recently submitted to HHSC or its designee, will be used for the annual GME payment calculation.

(5) To receive GME payments from HHSC, a non-state government-owned and operated teaching hospital must be enrolled as a Medicaid provider with HHSC and provide intergovernmental transfers to HHSC to fund the non-federal portion of reimbursement for GME costs.

(6) Payments under this subsection [subchapter ] will be made on a semi-annual basis.

(c) HHSC uses the methodology in this subsection to calculate [reimbursement for] GME cost reimbursement for teaching hospitals not described in subsections (a) or (b) of this section.

(1) Effective April 1, 2019, HHSC or its designee may reimburse a non-government owned or operated teaching hospital with an approved medical residency program the hospital's estimated Medicaid inpatient direct GME cost.

(2) Definitions.

(A) Teaching hospital--A [a] hospital with a properly approved medical residency program.

(B) FTE residents--The [the] hospital's number of unweighted FTE [full time equivalent (FTE)] interns, residents, or fellows who participate in a program that is determined by HHSC to be a properly approved medical residency program including a program in osteopathy, dentistry, or podiatry, as required in order to become certified by the appropriate specialty board:

(i) as reported on the Hospital Cost Report; CMS Form 2552-10; Worksheet S-3; Part 1; Column 9; the sum of Lines 14, 16, 17, and 18; [Line 27,] or

(ii) for hospitals excluded from the Prospective Payment System (PPS) for Medicare, as reported on the Hospital Cost Report; CMS Form 2552-10; Worksheet E-4; the sum of Column 1, Line 6 and Column 2, Line 10.01.

(C) Interim Medicare per resident amount (PRA)--If a hospital does not have a Medicare PRA reported on the Hospital Cost Report; CMS Form 2552-10; Worksheet E-4; Line 18; the greater of Column 1 or Column 2, then HHSC shall establish an interim Medicare PRA as follows.[:]

(i) The annual estimated cost of FTE residents will be the amount on Hospital Cost Report; CMS Form 2552-10; Worksheet B, Part I, Column 25, Line 118.

(ii) Divided by the FTE residents as determined in subparagraph (B) of this paragraph.

(D) Medicare per resident amount (PRA)--Average [average] direct cost per medical resident, as reported on the Hospital Cost Report; CMS Form 2552-10; Worksheet E-4; Line 18.

(E) GME Medicaid inpatient utilization percentage--The [the] hospital's proportion of Medicaid inpatient days, including managed care days, divided by the hospital's total inpatient days, as reported on Hospital Cost Report; CMS Form 2552-10; Worksheet S-3; Part 1; columns 7 and 8.

(i) The numerator (total Medicaid inpatient days including managed care days) is the sum of Worksheet S-3, Part I, column 7, Lines 1 through 4, 8 through 13, 16 through 18, 28, and 30 through 32 and all subscripts of these lines.

(ii) The denominator (total inpatient days) is the sum of Worksheet S-3, Part I, column 8, Lines 1 through 4, 8 through 13, 16 through 18, 28, and 30 through 32 and all subscripts of these lines.

(3) HHSC calculates the total annual GME payment for each hospital as follows:

(A) multiplies the FTE residents by the Medicare PRA or the interim Medicare PRA; and

(B) multiplies the results in subparagraph (A) of this paragraph by the GME Medicaid inpatient utilization percentage.

(4) On October 1 of each year, the cost report most recently submitted to HHSC or its designee[,] will be used for the annual GME payment calculation.

(5) To receive GME payments from HHSC:

(A) a hospital under this subsection must be enrolled as a Medicaid provider with HHSC;

(B) HHSC must receive the non-federal portion of reimbursement for GME costs through a method approved by HHSC and CMS for reimbursement through this program; and

(C) a hospital under this subsection must designate a single local governmental entity to provide the non-federal share of the payment through a method determined by HHSC. If the single local governmental entity transfers less than the full non-federal share of a hospital's payment amount calculated in paragraph (3) of this subsection, HHSC will recalculate that specific hospital's payment based on the amount of the non-federal share actually transferred.

(6) Payments under this subsection [subchapter ] will be made on a semi-annual basis.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 31, 2024.

TRD-202403531

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: September 15, 2024

For further information, please call: (512) 487-3480